CNN reports that DreamWorks Animation is facing a shareholder lawsuit that accuses the company of misrepresenting DVD sales for Shrek 2. The lawsuit, which could become a class-action suit, “claims DreamWorks CEO Jeffrey Katzenberg and Chairman Roger Enrico failed to disclose in the first quarter that sales of Shrek 2 DVDs were declining far more than expected” and that the company “continued to ship the title ‘far in excess of the actual demand’ and hid the fact that retailers were returning ‘massive amounts’ of unsold DVDs”. DreamWorks spokesman Bob Feldman said, “We believe the suit is completely without merit and we intend to defend ourselves vigorously”.